Tesla Loses Challenge Against Race Discrimination Lawsuit By Californian Agency

Elon Musk’s tense relationship with Californian officials has not been eased, after Tesla was denied a petition it filed back in June.

Tesla has been clashing with a Californian agency for months now, after the State of California’s civil rights agency, known as the Department of Fair Employment and Housing (DFEH), sued Tesla in February for race discrimination and harassment at its Fremont factory.

The lawsuit alleged that black workers at Tesla “are subjected to racial slurs by managers and supervisors, segregated to the lowest levels of the workforce, including the contracted workforce, and are severely under-represented in the ranks of executives, senior officials, and managers.”

Agency lawsuit

The civil action DFEH lawsuit alleges Tesla violated the Fair Employment and Housing Act and the California Equal Pay Act.

It said that it had received “hundreds” of complaints and conducted a three year long investigation.

DFEH also alleged that Tesla turned a blind eye to years of complaints from black workers protesting the near-constant use of racial slurs and derogatory language in the workplace.

It said black workers had also protested against the presence of racist writing and graffiti in common areas of the workplace, including swastikas and other hate symbols.

The agency is said to be seeking unspecified damages and for Tesla to reinstate workers who were unfairly terminated.

Tesla however was infuriated by the lawsuit, and previously said the lawsuit was “misguided” and was “a narrative spun by the DFEH and a handful of plaintiff firms to generate publicity.”

It pointed out that during its three year investigation, the DFEH “never once raised any concern about current workplace practices at Tesla.”

Confusingly, the Department of Fair Employment and Housing (DFEH is now known as the Department of Civil Rights (DCR), as of July this year.

Tesla petition

In April Tesla asked a California judge to pause the lawsuit.

In June Tesla then filed a petition with California’s Office of Administrative Law (OAL), claiming that the Department of Civil Rights (formerly the Department of Fair Employment and Housing) didn’t give the electric car-maker “fair notice of an investigation”.

At the same time Tesla alleged that the Department of Civil Rights (DCR), adopted “underground regulations” that disregard requirements the agency needs to make before filing lawsuits against employers.

Tesla said the state should further investigate allegations brought against it by the DFEH and allow a chance to settle the litigation.

The OAL is the agency in California that reviews state agency regulations and can recommend changes.

It says that if a state agency “issues, utilises, enforces, or attempts to enforce a rule without following the APA when it is required to, the rule is called an ‘underground regulation.’ State agencies are prohibited from enforcing underground regulations.”

OAL ruling

Now Reuters reported California’s OAL denied Tesla’s petition against the state’s civil rights regulator.

The letter denying Tesla’s petition is dated 8 August, according to Reuters, and did not provide a reason as to why it denied Tesla’s petition.

The OAL did however state that Tesla can still pursue its challenge in the courtroom.

Essentially Tesla’s challenge with the OAL was an attempt to rein in the department’s authority to pursue discrimination cases, by forcing it to take additional steps before suing, such as providing businesses with detailed explanations of alleged legal violations and making efforts to settle outside of court, Reuters reported.

In the pending lawsuit, Tesla has argued that the DCR sued without first notifying the company of all of the claims or giving it a chance to settle.

A California state judge is scheduled to hold a hearing on Wednesday on Tesla’s motion to dismiss the case.

Other lawsuit

Tesla is also battling another high profile lawsuit in California.

In January 2020 Owen Diaz hit Tesla with a lawsuit, alleging he had faced “severe and pervasive racial harassment” in 2015 and 2016, whilst working at Tesla’s factory in suburban Fremon

In October 2021, a federal jury ordered Tesla to pay $137 million in damages, for subjecting Diaz to a hostile work environment at the Fremont plant.

Then in April a federal judge ruled that Tesla was still liable to pay damages, but he reduced the $137 million jury award to $15 million.

Owen Diaz has since rejected the reduced award and opted for a new trial, which is scheduled for March 2023.